Oil settles above $108 a barrel, gas prices up

The price of oil jumped to a fresh 30-month high, above $108 a barrel Monday as fighting in Libya and unrest in the Middle East continued to raise doubts about future supplies.

Benchmark crude for May delivery gained 53 cents to settle at $108.47 a barrel on the New York Mercantile Exchange. At one point the contract rose as high as $108.78 per barrel, the highest price since September 2008. In London, Brent crude rose $2.25 to settle at $120.66 a barrel on the ICE Futures exchange.

Energy traders are watching the standoff in Libya, where forces loyal to Moammar Gadhafi control most of the western half of the OPEC nation. Rebels have seized much of the eastern coast. While most of Libya's oil exports have come to a halt, rebels are beginning to ship some oil from areas they control to help finance their uprising. An oil tanker was due Monday at the eastern port of Tobruk, according to Platts, the energy information arm of McGraw-Hill Cos. The tanker was expected to load about a million barrels of crude.

Previously Libya shipped about 1.6 million barrels a day or about 2 percent of the world's oil supplies. Most of it went to refineries in Europe.

In Yemen, security forces opened fire on protesters in another violent anti-government skirmish. Yemen doesn't produce much oil, but an extended conflict could disrupt nearby shipping lanes for tankers carrying nearly 4 percent of the world's oil.

Analyst and trader Stephen Schork said sagging demand in the U.S. may eventually pull oil prices down from their highs this year, but so far most traders seem to be waiting for the Middle East to cool off.

"We have more than comfortable (oil) supplies in the U.S." and high prices could seriously hurt demand, Schork said. "Yet investors keep piling money into the energy market."

Gasoline pump prices have followed oil higher and remain at record levels for this time of year. Gasoline added nearly 2 cents on Monday, reaching a national average of $3.662 per gallon, according to AAA, Wright Express and Oil Price Information Service. A gallon of regular is 16.9 cents higher than a month ago and 83.6 cents more expensive than the same time last year.

In other Nymex trading in May contracts, heating oil rose 3.69 cents to settle at $3.1714 a gallon and gasoline gained 1.75 cents to settle at $3.1688 a gallon. Natural gas futures lost 7.3 cents to settle at $4.289 per 1,000 cubic feet

__ Pablo Gorondi in Budapest, Hungary and Alex Kennedy in Singapore contributed to this report.